Swiss residents are increasingly drowning in debt

The step to getting into debt and not knowing how to get out of it is shorter than one might think. This is evidenced by figures from advice centres that are worryingly sounding the alarm. While 5,216 families came into the care of specialised services in 2022, that number has risen to 6,169 in 2023. The question at hand is what then to expect in 2024?

"The tendency to seek help from counselling centres has increased," explained Pascal Pfister, director of the Swiss Debt Counselling Centre. One reason for this is undoubtedly inflation, which, despite a recent slowdown, continues to put pressure on people on low incomes. The problem is that once in debt, getting out of it is almost impossible. "We're very concerned," Pfister added.

Most of the people who have contacted the department concerned complain of debts of between 12,000 and 70,000 francs. This is in line with what has been observed in previous years. Almost three quarters of those affected have tax debts. Three-fifths have debts to the health insurance fund, unpaid health care costs are widespread. Loan and credit card debts account for about 22 per cent.

Government support and tax traps

If a person gets into debt to the point of foreclosure, they can only keep a living wage. However, this amount does not include taxes and, as a result, people cannot pay current taxes and inevitably fall into new debts to the state.

The need for timely action was also recognised by the National Council: debtors should not accumulate new tax debts. Parliament believes that in the future, criminal debtors should have their taxes taken into account when calculating their living wage. "This would be an important step for people in debt," says Pascal Pfister. Parliament has recognised the problem, but further action is now needed.

In the meantime, debt counsellors are calling for better prevention. "This will clearly improve the situation of debtors in Switzerland," argues the director. "We have to give people a second chance." The debt problem in Switzerland requires a comprehensive approach and timely action. It is important not only to help people who are already in debt, but also to work to prevent such situations in the future.

The key to financial stability

Improving financial literacy, changing legislation and developing support programmes are key steps towards improving the country's debt situation. Alarming data from advice centres highlights the need for proactive action from the government and society to ensure the financial stability of the population. Financial education can help people better understand how to manage their money and avoid debt. Changes in legislation can create fairer conditions for debtors, and support programmes can provide the necessary help to those who need it.

The debt situation in Switzerland is complex and multifaceted, and tackling the problem requires efforts at all levels. Debt counsellors continue to provide the necessary assistance, but significant change requires coordinated action by all stakeholders. Ensuring the financial stability of the population is a challenge that requires the attention and efforts of all stakeholders.

The problem of debt is not limited to financial hardship. It affects people's psychological and emotional state, their ability to plan for the future and feel confident. That is why it is so important to create a system that not only helps people get out of debt, but also prevents debt. Raising financial awareness, access to counselling and support from the state and society all play an important role in creating a more stable and sustainable financial future for all Swiss citizens.